Over the years, we’ve worked with and within many a small business. Yet, it still surprises us just how many small business owners we speak to that do not have a clearly defined point or points of difference. Even more surprising is that many of these operate within ultra-competitive markets where, although differentiation can be difficult, it is also at its most vital.
There are two questions every small business owner should continually ask themselves: what makes my business stand out, and why would someone choose to buy from me over my competitors? Many business owners fail to answer these questions and, as a result, price often becomes the only differentiator for their customers. I can assure you that when a full-blown price war erupts, the survival rate of just about every small business drops dramatically.
The reality is that in a highly competitive market, very few small businesses are truly one of a kind. To make a business stand out, it needs to develop a distinctive point of difference or selling point (USP).
Here are a few tips on developing a sustainable USP.
When analysing what it is about your small business that will set it apart, look at how other companies are using their USP to their advantage. And don’t just look within your own industry – broaden your search to include businesses across other sectors, as you will often find a novel idea that you can adapt for your own purposes.
Depending on the size of your business and your customers, you may need a number of USPs tailored to specific product or service areas. For instance, you may operate a window cleaning business with clearly defined market segments such as home owners, real estate agents and commercial property managers, where you provide each with a different product/service. In this case, having a point of difference not just for the company, but also for specific products/services is important.
It is very easy for business owners to get caught up in the everyday running of their business, instead of making time to view their operation from the customer’s perspective. To create your point of difference you need to step back and scrutinise what your customer really wants from the product or service you supply.
It could be something as simple as the pizza shop that operated six nights a week – closed only on Mondays. Following some basic market research, they discovered that their customers were frustrated as they couldn’t get a pizza on a Monday night (their competitors also closed on Mondays). So, they changed their opening hours to six days a week – closed Tuesdays. Every Monday night, they had the whole local market to themselves, and sales increased significantly. So, their USP was as simple as ‘We’re open every Monday.”
Having identified their unique point of difference, they were also able to charge a premium price.
Truly effective business marketing goes beyond the traditional customer demographics, such as gender, age and geographical location, which many businesses collect and analyse. While important, it’s necessary to go one step further and delve into really understanding what motivates and drives your customers.
As part of this process, it is important to acknowledge different motivating forces that your customers may have. Don’t be surprised just how often fear comes into play here. I.e fear based on an uncertainty of the quality of the product or service on offer. Therefore, having a guarantee as part of your USP will often allay any concerns your customers may have around initial or repeated purchase.
Remember, the best source of information on why customers are choosing your business over your competitors will come directly from your customers themselves.
Don’t be afraid to ask them questions or request feedback using surveys, questionnaires or review sites. You may be surprised by the honest – and useful – answers you receive.
Once you’ve identified your point of difference, it’s important not to just ‘set and forget’. Many business owners fall into this trap, and in today’s fast paced and dynamic business world it can be perilous. While customer demographics often remain the same over an extended period, their fears, concerns and motivations can quickly shift.
Reassessing your marketing, and particularly your point of difference, at regular six-monthly intervals is highly recommended.
With your up to date USP research and analysis on hand, you’ll be in a solid position to strengthen your marketing messages and help improve your bottom line.